Financing

Solar loans in 2026: you own it, but read the dealer fee first

A solar loan means you own the system and repay a lender, usually with nothing down. Until the end of 2025 that came with a 30 percent federal tax credit. It no longer does, which changes the arithmetic considerably and makes one particular cost worth understanding before anything else.

What changed on January 1, 2026

A homeowner financing a $24,000 system in 2025 could expect roughly $7,200 back as a federal tax credit, which many loan products were structured around: an 18-month interest-only period on the expectation that you would put the credit against the principal. That credit is gone for buyers. Any loan structured on the assumption you will receive it is built on a number that no longer exists, and any payment schedule that assumes a lump-sum paydown in month 18 needs checking very carefully.

An American couple reviewing an electricity bill and a laptop at their kitchen island — Illustrative photography.

The dealer fee is usually the biggest number nobody mentions

Lenders pay installers to offer low advertised interest rates. That cost is added to the system price you are quoted, so a 3.99 percent loan on a $31,000 system can be more expensive over its life than a 9 percent loan on the same system priced at $24,000 cash.

The Consumer Financial Protection Bureau examined this in August 2024 and found markups typically between 10 and 30 percent of the cash price, sometimes above 50 percent, described variously as program fees, lending fees, finance fees, platform fees and original issue discounts. Independent 2026 estimates put the average embedded fee at around 22 percent.

The question that surfaces it: “What is the cash price for this exact system, and what is the financed price?” The difference is the fee. Ask it in writing.

When a loan is the right answer

When you want ownership, you have enough state incentive value to make ownership pay, and you can find a product with a modest dealer fee. In New Jersey the SREC-II at $77 per MWh for 15 years accrues to the system owner, which is a genuine argument for owning. In New York the state credit of up to $5,000 is available whether you own or lease, so it is less of a differentiator there.

Financing, where offered, is provided by third-party lenders on their own terms. Approval is not guaranteed and is subject to credit assessment. Interest, fees, dealer fees and the total amount repayable will be disclosed by the lender and the installer before you sign anything. Solar Funding USA is not a lender, broker or credit intermediary.

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Solar loan questions

What interest rate should I expect on a solar loan in 2026?

Advertised rates commonly sit around 6.99 to 7.99 percent on state-supported products such as Connecticut's Smart-E loan, and vary widely elsewhere by credit tier. The headline rate is the wrong thing to focus on. A low advertised APR is frequently funded by a large dealer fee added to your system price, so the cheap-looking loan is often the expensive one. Compare the total amount repayable, not the rate.

How do I find the dealer fee?

Ask for the cash price of the identical system and compare it to the financed price. The difference is the dealer fee. It may be labelled a program fee, lending fee, finance fee, platform fee or original issue discount. The Consumer Financial Protection Bureau found these typically run 10 to 30 percent of the cash price, and independent 2026 estimates put the average around 22 percent, roughly $5,700 on a typical system.

Does a solar loan put a lien on my house?

Some do and some do not. Unsecured products such as Connecticut's Smart-E place no lien. Others file a UCC-1 fixture filing against the equipment, which is not a mortgage lien but will show up when you sell or refinance and has to be dealt with. PACE financing in Florida creates a property tax lien, which is a materially bigger deal. Ask what is being filed.